Hurricane Katrina struck just as Community Coffee was implementing a new business process management (BPM) system....
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The storm caused delays, but steps the company took to prevent other problems helped the project succeed in the end.
When it implemented a BPM application from SAP and IDS Scheer, Baton Rouge, La.-based Community Coffee made plans to avoid typical project pitfalls like delays, scope creep and ballooning budgets. While it didn't foresee 135 mph winds and a 28-foot storm surge, the company's planning helped minimize the expected project challenges and survive the rather large unexpected one.
Community Coffee employs around 1,000 people, about half of whom are part-time, distributing coffee products across the southern United States, and it has about 35 coffee houses in southern Louisiana. The company has revenues of less than $200 million.
Community Coffee chose IDS Scheer's ARIS Smart Path and SAP All-in-One for the food industry to improve its inventory management and asset tracking and enhance integration among sales, production, planning and inventory.
Just as Community Coffee was finishing up the preparation phase of the project, disaster struck.
"Our team had been working together for about a month, and things were beginning to gel," said David Fahr, ERP project manager for Community Coffee. "Our consultant team was down the week before Katrina to begin the blueprint phase of our project. They left Baton Rouge Friday; Katrina hit Sunday."
When the storm hit, Community Coffee, including the project team, shifted its focus entirely to Katrina, according to Fahr. On top of that, there were no hotel rooms within 100 miles of Baton Rouge for the IDS Scheer consultants to stay in.
"It delayed our project by two months, if not more," Fahr said.
The setback could have been worse if Community Coffee hadn't had a well-defined, narrow project scope. The "skinnier" the project scope, the better -- especially for small and midsized businesses with limited IT resources, Fahr said. For example, Community Coffee removed HR and payroll from the initial project in order to have a narrower focus.
"I have heard of too many projects that have major scope changes halfway through, like adding a new sales organization or company due to an acquisition," Fahr explained. "It's important to minimize outside activity and for the company to concentrate on the project -- that means no acquisitions, no major company changes."
Selecting the right personnel was also a key to Community Coffee's project success.
"When forming the project team, handpick the best folks from each area," Fahr said. "If management says no, reiterate the investment being made and the sacrifices from everyone."
Also, upper management must be directly involved from the beginning. Requesting the best resources to be dedicated to a project team is going to force sacrifices all around. Upper management has to understand and support the project to see that the sacrifices will pay off, according to Fahr.
But selecting the project team is by no means a one-and-done activity for upper management, he said. These executives must be kept involved throughout the project.
Communicating early and often can avoid any embarrassing surprises for upper management. For instance, Fahr said, monthly project status meetings with project sponsors were an important part of Community Coffee's success.
"Not every meeting is going to be exciting and ground breaking, but that's OK," he said. "As a group, you have to continue to meet."
The implementation went live in July 2006, just over 10 months after Katrina hit southeast Louisiana. There were relatively few surprises, but there were some challenges.
Supply chain has been the company's biggest challenge since going live. For example, before SAP, Community Coffee was lacking material requirements planning (MRP) and inventory control procedures and was instead using spreadsheets.
"These procedures take a lot of discipline, no matter what ERP system you are using, so it has been a bit of a painful culture change," Fahr said. "A painful one, but a good one."
This and other issues could have been dealt with more effectively if the company had kept the project team together longer after the go-live date, Fahr said, suggesting six months as a realistic period of time.
"We kept the core of our team together for three months, which was not enough," he said. "We probably could have solved more process improvement issues quicker with dedicated resources for a longer time."